What does YOUR Year End Review Look Like?

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The year end brings a perfect time to take a clear look back to see what worked and what didn’t in your business.  Too many times, senior leaders look at “did we hit our number?” as the all consuming barometer.  That is absolutely critical.  It’s also dangerous if that’s the only thing that’s reviewed with a magnifying glass. 

Start at the basics to ground you in the brutal economic truth.

  • Are your sales & profits up or down?  How close to your budget?

  • Are you getting better at what you do?  Usually your margin %’s are an indicator here, all things being equal (input costs, pricing), margins moving north indicate productivity improvements and/or favorable mix.  Sometimes businesses plan them up or down based on op ex investments, so margins relative to expectations are the critical view.

  • In almost all cases, up beats down…….but in my experience, businesses that can not grow margin rates over time are forced to grow the topline at accelerated rates, and that can be expensive for shareholders if it’s not done organically (ie via acquisition).  Growing margin rates and top-line revenue are obviously not mutually exclusive, doing both is where it’s at.

 

Investment & Focus areas

  • People/Team?  (new hires, promotions, existing employees), how have you done? 

    • Are key individuals getting significantly better, or are they treading water?
    • How much did you spend on training?  Did you see an impact?  If not, why?
  • Culture? 

    • Overall workforce engagement (morale) and ownership of outcomes and common definition of a great future.  What have you spent against this?  What was your ROI, or if too difficult to measure, would you repeat it?
    • What’s your turnover rate and is it better or worse?
    • What’s your safety record?
    • What are your quality defects?
    • Are you happy with the results orientation of the business among your people?  Or do they have just a cursory view of business performance and their respective role in improving it?
    • Is recruiting becoming easier because your existing workforce is turning into the company’s best advocates?
  • What does your business pipeline look like going into the new year? (Customers)

    • How strong are you with your existing customers?  Are they growing as a group, flat or declining?  What are their intentions going forward?
    • Strong enough to recover from key customer losses and still grow?
    • How does your innovation stack up?  Are the new products/services in development likely to pull margins up or down, or are you doing more of the same?
    • Are you telling your story (marketing) effectively and attracting people to YOU?  Have you embraced the world of digital or still part of the masses that think it doesn’t apply to you?
  • Process Improvements?  All areas of business have a process, whether well defined or not. 

    • Have you analyzed your key business processes to look for improvement?
    • What’s your key business process where the management team comes together?  How strong?
  • Equipment?  Better, more efficient, safe equipment, or more total capacity….

  • Technology? 

    • Still stuck in a world of cocktail napkins or contemplating a real company system?  Or are you stuck in a world of spreadsheets where power users get it, others struggle?
  • Last, is your company stronger financially at the end of 2016 vs. the start of it?  Multiple metrics for this, but your balance sheet ratios of liquidity, debt coverage, shareholder equity and cash are all good indicators.  NOTE:  All of these metrics are the outcomes of everything above

[Continue Reading…]

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Do The Crazy One’s Keep You Up at Night?

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Any better ad of all time than Apple’s “Crazy ones?”

I have no idea if this sold more Apple products, which in my opinion is the real definition of advertising success.

But sometimes, thoughts (communicated in ANY medium) serve a purpose other than selling.  They try to define the future for key people, in particular the troops within a business.

  • The crazy one’s drew a line in the sand and elevated apple to an idea, an aspiration, a license for people to be different.

Those people could be their customers, their employees, their suppliers.

Now ask yourself as a business leader:

  • How many crazy one’s are working for YOU?

  • How many suppliers in your network fit into this mode?

  • What about your competitors?

Are you OK with crazy one’s working for your competition?  Or does this thought keep you up at night?

There is comforting news if Crazy One’s working for your competition keeps you up at night:

Our education system doesn’t inspire crazy one’s.  It inspires conformists.  People coloring within the lines.  Talking when called upon.  So by definition, crazy one’s are not the norm.

Neither is greatness.

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The Growth Challenged Player: Warning Signs

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Most leaders like to talk about growth.  Few will do what’s necessary to make it more than a concept.

There are plenty of reasons for why businesses don’t grow:

  • Industry is flat to declining
  • Too many financial constraints (tight margins, leverage, lack of capital for investment)
  • Lack of talent
  • Competition is dominant

The list can be endless.  But at it’s core it is more basic than business constraints.

Growth begins and ends with INDIVIDUALS and their ability to grow themselves.  

This is ESPECIALLY the case if you happen to work in one of those “non-sexy” businesses that are tied to industries that measure growth in single digits vs double or triple digits.

For leaders wired for growth, there may be no MORE frustrating profile than people that are simply unable or unwilling to grow THEMSELVES.  If those people are in a key role, this can not persist for long or something will need to “give.”

Many people are not ready for dynamic growth.  Why?  It isn’t easy.  It creates CHANGE.  Some people flat out struggle with change.

There are clear warning signs for people that will struggle with a growth orientation.  One or two aren’t a problem, but if the person starts checking off multiple warning signs, leaders better be prepared to have a difficult conversation.

The “Growth Challenged” Warning Signs

If they are Growth Challenged…….they very well MAY:

  • LOVE their routine.  Same route to work.  Same activities.  Same check-list.  Same closing time.  Same starting time.  They value ROUTINE and the certainty it creates OVER the uncertainty of change.  Challenging routine is a no no.

  • Invest VERY LITTLE in themselves.  No books, newsletters, You Tube videos, courses, etc have been consumed and assimilated in MONTHS trying to take their game up a few notches.  Because that is a break from routine, or countless other excuses not to grow (no time, too busy, etc).

  • Never make noise.  Never involved in conflict that results from trying to push the envelope, get better, break things, bring people together and build a team.  Sometimes rumbles are good.

  • Always involved  in the same conversations, vs developing new ways to conquer new paths.

  • Stuck to old processes that worked in a stable world but add little value in a dynamic world.

  • Defensive when receiving feedback.  As if their purpose is to protect their own image vs. figuring out how to grow.

  • Never SEEK feedback.  Too risky, or why bother?

  • Don’t ask for help when they hit road-blocks.

  • New challenges always need to be handled by someone else…..

  • Cling to the past and may even question the fundamental premise of growth: “Is this even better?”

There are natural skeptics in the world, or people that like to play devil’s advocate with every new idea.  That doesn’t mean they are anti-growth.  These could be some of the greatest assets in building a growth mindset in companies.  That’s not what the growth challenged player is about…

Leaders need to understand if their players are capable and WILLING to grow.  

If there are multiple warning signs, they need to have a difficult conversation that makes the concern clearly known.  These are not conversations where you sugar coat.  If Growth is important and a key player exhibits anti growth tendencies (and multiple warning signs), they need to clearly understand this.

The leader has a choice if they do not want to confront the warning signs with the Anti-Growth Players:  Don’t confront it.  Continue to be frustrated.  Give yourself a nice little barrier on your marathon.  ANKLE WEIGHTS.

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Too Much? Over the Top & All In

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Questions are magic for jump starting the mind.

A great, yet simple question came from one of my colleagues in the context of  developing a series of ideas:

“Is it too much?”

Meaning, is it too much of a break from tradition, outside of our comfort zone and those that will be touched  by it?

I bet everyone asks themselves sub-consiounsly something along these lines when developing any NEW thinking.

It’s in part driven by fear.  Maybe fear of rejection, or fear of the blood/sweat/tears that may be associated with pulling the idea off.  Few things are easy.

How many great contributions are NOT brought forward in a business because people are holding back and thinking it may be too much?  Too many.  What a shame….

Maybe it’s too many because our education system does not value “playing loose” but insists on staying in line and talking only when your called on.  18 years of that model and you wouldn’t exactly be trained to push the envelope would you?  That’s a digression, but I’ve profiled some lessons from my son’s first grade class…

Leadership’s role is to inspire a culture where people disrupt the status quo and feeling trusting enough to do that.  Killing business as usual.  

Cultures that inspire fanaticism, breaking things and pushing the envelope may often be chaotic, and not everyone thrives in chaos.

What about the individual?

First, performance is rarely equally spread.

Show me any company and I will show you a “bell curve” of distribution among its talent.  There will be an 80/20 rule emerge where the few contribute out-sized results.

We can all wonder why this exists.

  • Natural Born Talent……they hit the genetic jackpot!
  • Education!
  • Great Mentors!
  • Luck!  Right place, right time!
  • Out-sized achievements that were parlayed time and time again….

How about this for a hypothesis?

The people  that tend  to be the top 10% of any business come in all shapes and flavors.  But they tend have one thing in common:  They believe that nothing is too much.  They tend to go over the top.  They go all in, not just enough, in every area that matters.  

All in

Pick any area of the operation that matters, and I bet you will see something emerge with the stars.  Everything about them, when compared to the “average” will be considered TOO MUCH, especially in the eyes of the average.

There’s a great  law of statistics that is worth understanding:

Correlation does not imply causation.

Just because two things are related, does not mean one drives the other.  BUT, when 2 variables move in the same direction……you are in the area of needing to poke around and learn more.  You are getting warmer.

And maybe the most important question of all?  

If you have a burning desire to achieve something, ask yourself:

Am I ALL IN?  

If your being honest with yourself and the answer is not an emphatic HELL YES!, CONGRATS!  You have just walked up to the starting line.

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Innovation in Action: 2 Cellos

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Re-invention.  Innovation.  Those words that businesses dream about for both survival and long term growth.  

It comes from a mindset that is open to:

  • New ideas, especially ideas that are “Not invented here.”

  • Outside thinking, completely different areas of life

  • A relentless pursuit of action:  “How do WE apply that to OUR business?”

  • A willingness to accept failure, scrape your knees and get at it again.

Take what could be one of the most boring instruments you can imagine from high school band:  The Cello.  Do you remember people dying to sign up for that instrument?  Could you imagine the masses ever paying money to see people perform it, outside of an orchestra?

With that said, I present 2 Cellos.  Their videos tell the story, as well as the millions of people following them.  

Gamechangers indeed. 

 

2 cellos - innovation in action

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The Inspirational Story of Richie Parker

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One of the best 7 minute inspirational stories I’ve come across, Richie Parker.  The video tells the story better than I could, but here are some thoughts that came to mind.

  • Parents Matter
    • What would the world look like with more parents like Richie’s?  Shouldn’t every kid have the opportunity to ride a bike?
  • Attitude Matters More
    • What if everyone had the ability to NOT let adversity bring them down, not accept no for an answer, and had the optimism and ingenuity to just simply figure it out?

What if every organization was open minded enough to give a person like Richie a shot, a real opportunity to contribute?  

Do you think Richie is a massive difference maker in all ways at his organization?  
I bet the competitors are kicking themselves for not having Richie, I know I’d want him on MY team.  

Game-changers in Life are hiding in mysterious places.  Being open minded to the new and more importantly, DIFFERENT is the first step to a new world of opportunity.  

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The $ Shave Club: Disruption in Action

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Sometimes disruption happens right under your nose.  Take a look at the men’s razor blade category:

  • Needs to be continuously replenished.
  • Massive market.  Let’s call it 50% of the world’s population.  Maybe a bit less if you don’t mind facial hair.
  • Huge barriers to entry.  How can you get into this category?
    • You’re not just going to “up and build” a factory, it takes massive capital and expertise
    • Your also not going to unseat one of the established brands (Gillette) and their massive branding investment.  
    • If you could conquer these 3 barriers, you need to get the consumer to vote, which means you need access to distribution.  In CPG, that’s the health & beauty buyer at the retail chains.

So how do you gain a slice of an industry dominated by the 800lb Gorilla? 

  • Find a source of supply.  Nearly every category has Private Label & Contract Manufacturing supply.

  • Forget the middleman in the distribution chain, go directly to the consumer.

  • Build your own brand, unconventionally.  Use social media, be edgy, create stories.

  • Keep expenses LOW.  To the bone….

In other words, do everything DIFFERENTLY than the industry leaders do.

How do you know when the big guys are sleeping at the switch?  They begrudgingly acknowledge the up-start.  Then they immediately cling to their existing business model, defend it and ignore the very threat in the first place.

  • “We have products at those price points too!”
    • Maybe, but can I find them when 80% of the shelf space is covered with your more expensive stuff?
    • But you won’t deliver it to my doorstep will you?  Of course not, that would annoy the retail buyers wouldn’t it?

You see these types of up-starts more and more.  SODA stream comes to mind.

Sodastream

If Coke or Pepsi do not have a team figuring out how to buy and integrate this company into their model they would need their heads examined.  When I say “team”, I’m talking about a team of less than 10 people.  In an urban office, FAR away from headquarters, made up of strategic thinkers with minimal internal experience within Coke or Pepsi.

Sometimes experience is what prevents the 800lb gorillas from seeing a disruptive model.

Blinders off.  

Disruption lenses on.

http://online.wsj.com/news/articles/SB10001424052702303624004577338103789934144

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A Wake-Up Call to High School Principals

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This is Your Wake Up Call  Hustle or Bust, Where Old School Meets New SchoolI like “Wake-Up Calls.”  They signify the start of the day.  But if your’re like me with the START EARLY mantra, you probably don’t utilize them. There are a couple of professions that need proverbial Wake-Up Calls, they are asleep at the switch or tone deaf to realities of the marketplace.

One of my favorite posts was a “Wake-up Call To Sales” where I profiled a great sales professional that stands out, in a fantastic way among many that are average at best.  I affectionately refer to him as “Harry Hustle.”

I’ve been thinking a lot lately about another segment of our society in need of the proverbial Wake-UP call: Education.  In particular, high schools.  Better yet, high school PRINCIPALS.  

The buck always starts and stops with the one in charge.

Although it’s been 20+ years since I cut up in high school, I have however volunteered in the high school classroom in 3 different, 8 week courses taught in ’97, 2008, & 2009 with one of the great non-profits, Junior Achievement.  Teaching Free Enterprise to the future of our country is nothing short of exhilarating and I highly recommend the experience to give back your talents to those that will soak up an outside voice in the classroom.  And if you’re in marketing, there’s nothing better than spending time with today’s younger generations.

It’s hard to relate to the NEW SCHOOL if you’re forever stuck in your OLD SCHOOL ways.

There are some take-aways I’ve had in these experiences that have me concerned; 2 come to mind…

  1. Personal Financial skills are non-existent in the high school curriculum.  Check books, basic investments, budgeting, etc.  The basics of spending less than you earn.  Absolutely no evidence that it is more than a fleeting thought in the classroom
  2. Goal Setting 101 – “College preparatory” is more than learning pre-calc, it’s about setting personal goals and achieving what one wants in life.

If you learn the PROCESS of achievement, the “WHATs” you need to know will take care of itself.

This country is in massive debt and there seems to be no end in sight.  We just came through the biggest “debt fueled” housing bubble in our generation.  Excessive Debt and poor financial decisions were (and still are) all around us.  I’m sure there are exceptions but High Schools aren’t responding fast enough.  And bold enough.

Gamechangers exist in all professions.  In teaching, I’ve written about a Game-changer in Music Education, the teacher of PS22 chorus.

High School Principals:  Game-changers needed

Image Credit: Pastemagazine.com

Here are 4 simple, executable ideas I would start with.

  • Scrap_____ (fill in your choice of Old School Elective that has existed for 50+ years) and insert “Foundations in Goal Achievement” as mandatory curriculum.  Nothing complicated, build it around SMART Goals.
    • Specific
    • Measurable
    • Actionable
    • Realistic
    • Time-bound
Scrap another one, and teach the basics of Finance 101:   “Earn 30, you better spend less or the ink will be red, and bad”.
    • Utilize Excel in every class.
    • Throw in some basics on the stock market, how companies make money.
    • What living within your means is about.
    • The concept of an emergency fund.
  • Let the leadership oriented kids start optional clubs around these classes, something interesting will emerge…
  • Bring in business and community leaders weekly to bring these lessons to life from the real world.  All the principles need to do is ask, maybe even create a “personal board of directors” over-seeing this transformation.  This personal board would help hold the principal accountable, keep him/her motivated and continually adjust the approach.
    • Business leaders are notoriously busy, but who could resist a Principles plea to take his/her school to a new level?
Are the above suggestions the “best” suggestions to create the change we need in high schools?  Maybe not. What’s important is that SOMETHING changes, that schools become flexible enough to have a real time impact that address real problems.  Pick a general direction and move towards a more practical future.  In the process, we will equip our younger generation with a fighting chance…

Leadership and change is not always about coming up with the best plan.  It is about rallying everyone to a better future.

Like all investments, the greater the runway (time) ahead of you, the better the chance of a positive return.  Start with the greatest runway, our younger generation…..

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Innovation Rocket Fuel: Moms On A Mission

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What is the catalyst behind big positive change?  Something improved & break-through in business or the community?  I can think of a few catalysts on the surface that drive change

  • The Mad Scientist – It’s hard to keep creative thinking down for long….
  • Survival – Expenses rising faster than revenues, creating a brutal math problem with negative consequences if change does not happen fast
  • A societal need – Someone recognizes an unmet need and looks to fill it:  Hunger, housing, general welfare
  • Personal incentives (put in place by someone else):  “I help drive it, I benefit from it.”
  • Failure.  It’s been well documented that innovation comes from failure, learning from experiments that did not deliver, but new learning was captured and then applied in a different way.

I’ll introduce a more simple, yet powerful force that combines many of the above elements.

Moms.

Correction:  Moms working together on a common cause, one that is deeply personal.

I’m not talking about the Mom spending power or the Mom’s influence on purchase decisions, which has been well documented.

What I AM talking about is…

The raw impact that can be made when 2+ Moms get together and decide something needs to be done.  And THEY are the ones that need to make it happen.  Because if THEY don’t do it, it will not happen.  And if it does not happen….the consequences are greater than the blood, sweat and tears that result from trying.  So with that, I introduce one of the most powerful catalysts I have witnessed for creating change:

Moms on a Mission

Melissa Todd & Kristin Barek are the spotlighted Moms on a Mission.  They are the driving forces behind bringing Best Buddies to Memphis, a cause that is certainly near and dear to my heart for its focus on social inclusion for those with intellectual disabilities.

Best Buddies Memphis

Melissa Todd & Kristin Barek, Moms on A Mission

In less than 2 years I’ve seen this organization go from idea, to start-up, to setting big goals to expand the service.  This 2 minute video details out their journey well.

http://www.myfoxmemphis.com/story/20752052/moms-on-a-mission-for-best-buddies

Best Buddies international is a powerhouse in the charity world with unbelievable impact.  But there impact was not felt in Memphis without a local chapter. [Continue Reading…]

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Understanding Innovation: Learn From What “Wows” You!

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Innovation is easy to learn from real life experience.  How?  Find products you consume that simply “wow” you, make you talk and make you want to learn more.  Experience them, research them, and reverse engineer to YOUR business model if there is something worthy of “borrowing.”

The process is simple:

  • Find a product you use that makes you talk about, brag, say “try this!”

  • Study the packaging, one of the most critical elements of branding

  • Do some basic research:  Check out the social channels, website, basic Google news/buzz

  • Write down what’s working for the product, ultimately what can be “borrowed.”

Innovation does not need to be a R&D break-through to work.  It also does not need to be driven by costly third party agencies that have a knack for mystifying the process.

But it does need to be special to matter.  More importantly, all the elements of the marketing mix must come together to create a brand loyalist.  Here’s one that nails the equation.

My wife brought the following home:  Popcorn Indiana, “Black & White Kettle corn.”  It was so good the devil must have made it.

Popcorn Indiana Black & White Popcorn

We are not big popcorn eaters, but we are always hunting for the new & different.  This hit the mark.  The combination of chocolate and salt is out of this world.  Guess what else is?

  • The packaging – There are so many health & “quality” claims I’m almost convinced I’m eating a banana.
  • The social media call-outs.  Even better?  Their social media engagement.  They get that social without being “social” is useless. They clearly have standards in place on response time, engagement, and are clearly having fun.  And why not, this is popcorn right?
  • Their website and product line-up – Flavors and unique combinations is what they do; now I want to try the others.  Multimedia, clean images, they simple messaging very well.
  • The founder of the company is somewhat of a serial entrepreneur…..you can learn a ton by learning about a founder.

I don’t know specifics about the Popcorn category, but it’s fair to assume since it’s a salty snack that it is dominated by big players like Frito Lay.  Low cost producers with massive distribution networks and marketing spending.  Can’t out-spend or “out-muscle” the big boys.

But you can always build a winnable plan that doesn’t confront them head to head.

Innovation should be at the top of the list for differentiating a business.  Being different and unique always serves a simple purpose:  It makes direct comparisons difficult.

When that happens, price is less of a factor…

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